Research in Motion may have to write off more than US$1 billion as its smartphones and tablets gather dust in warehouses instead of being snapped up by customers. The value of its inventory rose from US$618 million a year ago to over US$1 billion as lagging sales keep devices on shelves longer. This figure does not account for all the devices also in stock at RIM’s carriers and retail partners either. At the company’s peak in mid-2008, that value was than US$500 million.
As inventory sits in warehouses, it is gradually losing value. The writedown may be needed to account for that declining value. It would be RIM’s third recent writedown in recent history. It would follow similar moves in December (US$485 million to write down PlayBook inventory value) and in March (US$267 million for BlackBerry inventory).
RIM’s market share has been dropping quickly in recent months. According to research firm IDC, it stood at 6.4 percent last quarter, half of what it was the same quarter a year ago.
RIM is pinning its hopes of a resurgence on its upcoming BlackBerry 10 operating system and devices. These are expected in the “latter part” of the year. Until then, the news from RIM promises to be grim (such as the recent rumour of another 2,000 layoffs).
Read more: Bloomberg